Car Payments Have Become The New Mortgage As Some Americans Face 100-Month Loans
- Fresh data shows monthly new car payments hit $748.
- Used car loans average $532 per month with 11.4% interest.
- Some Americans are now taking on 100-month car loans.
Car buyers in the United States are facing one of the most expensive markets in recent memory, and the data is starting to show just how steep the climb has become.
More than 80 percent of new car buyer had to finance their purchase their vehicle, and last quarter, the average monthly payment was an eye-watering $748. Newly-released data from Experian has shed light on just how much of a financial burden car ownership can be, even for the millions opting for used models instead.
Read: Average New Car Price Breaks $50,000 Barrier For The First Time Ever
New vehicle prices have surged over the past five years, with the average transaction price rising more than 30 percent since 2020. In September, that figure crossed the $50,000 threshold for the first time ever. That escalation has reshaped monthly payments even before interest rates are factored in.
What a Typical Auto Loan Looks Like Right Now
The latest Experian data focuses on average auto loans during the third quarter, comparing new and used cars across the United States. A typical new car loan comes in at $42,332, with buyers paying an average of $748 per month and facing an interest rate of 6.56 percent.
Even a 1 percent change in interest rates can noticeably affect monthly payments. For a $40,000 loan over 72 months, that difference typically adds or subtracts about $20 to $25 per month.
Some Car Buyers Now Facing 100-Month Loan Terms
And that’s not even the worst part. As we’ve reported, in an effort to manage rising prices, buyers are increasingly stretching loan terms well beyond traditional norms. Loans lasting 72 months, or six years, have become common, while a growing share now extend beyond 84 months, or seven years, with some even reaching 100 months or more than eight years.
Read: The Shocking Number Of Americans Locking Into 84-Month Loans To Afford Cars
Extending the length of a loan can bring monthly payments down, but the overall cost rises sharply. A $40,000 loan paid over eight years instead of five might shave off a few hundred dollars each month, but it also adds thousands of dollars in interest over the full term.
Used Car Payments Lower, but Interest Rates Climb
As you might expect, typical monthly payments on used cars tend to be lower, though the interest rates are significantly higher. The average monthly payment comes in at $532, with loan amounts hovering around $27,128 and interest rates averaging 11.4 percent.
Loan terms aren’t far off from those for new cars either, with the average used car loan running just under 67 months. On the other hand, only 35.48 percent of used car buyers financed their purchase last quarter
Auto Loan Averages
Source: Experian data as of Q3 2025
Credit scores were also revealed to play an important role in average monthly payments. When it comes to new cars, borrowers with excellent credit scores of between 781 and 850 have average payments of $727, while those with prime (661-780) have payments of $754.
Interestingly, the data shows that borrowers with deep subprime credit scores, ranging from 300 to 500, have lower average monthly payments of $748. But that figure doesn’t tell the whole story.
Also: Americans Trading In Cars Owe More Than Ever And It’s Only Getting Worse
These borrowers typically take on smaller loan amounts, which explains the reduced payments. For instance, while a prime borrower finances an average of $44,480 for a new car, the average for a deep subprime borrower drops to just $35,286
Additionally, those with poor credit scores are likely to be hit with much higher interest rates. In fact, whereas the average interest rate for a super prime borrower was 4.88 percent last quarter, it was 9.77 for a near prime borrower with a credit score between 601 and 660, and a massive 15.85 percent for a deep subprime borrower.
Average Auto Loan Payment by Credit Score
Source: Experian data as of Q3 2025
The Auto World
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